Scam ads used a BofA exec. Now Meta faces the fallout.

• Key insight: The case is anchored on ads that impersonated a sitting Bank of America executive, Savita Subramanian, to push a fraudulent stock scheme that investors say cost more than $300 million.
• Supporting data: Santa Clara County alleges, citing internal Meta documents first reported by Reuters, that Meta earns about $7 billion a year in "violating revenue" and carries roughly 15 billion scam ads a day.
• Forward look: The cases are heading into discovery, where Meta may have to turn over internal records; the open question is whether litigation forces change or it waits on Congress.

Overview bullets generated by AI with editorial review.

Scammers impersonated a senior Bank of America executive in ads on Facebook and Instagram, using her name and image to sell a fake stock-trading group that promised 95% accuracy and daily returns of 30% to 40%. Investors say the scheme cost them more than $300 million.

Now a federal judge has given those investors a rare shot at making Meta answer for it.

In an order earlier this year in Bouck v. Meta, Chief Judge Richard Seeborg of the U.S. District Court for the Northern District of California let claims for aiding and abetting fraud, negligence and unjust enrichment proceed against the company.

Seeborg found that Section 230 Communications Act, the 1996 law that shields online platforms from liability for what their users post, does not protect Meta at this stage of the case.

The investors who sued argue that Meta's ad tools helped build the scam ads rather than simply host them. The Meta ad tools (branded Advantage+ Creative, Dynamic Creative and Flexible Format) allegedly generated and tested the copy and imagery.

Under a federal court's standard set in a 2008 case known as Roommates.com, a platform loses Section 230 immunity when it materially contributes to unlawful content.

Seeborg found Meta's tools could plausibly cross that line, making the company a co-creator rather than a neutral host. That finding pushes the case into discovery, the phase of a lawsuit where each side must turn over evidence.

Meta did not respond to a request for comment for this article.

The impersonated executive was Savita Subramanian, Bank of America's head of U.S. equity and quantitative strategy. The bank did not respond to a request for comment.

Much of the fraud draining bank customers' accounts begins as an ad on Meta's platforms.

Americans reported losing $2.1 billion in 2025 to scams that began on social media, more than through any other way scammers reach people, according to the Federal Trade Commission.

The three platforms where they reported losing the most all belong to Meta: Facebook, WhatsApp and Instagram.

The fight over Meta's liability is, at bottom, a fight over who absorbs losses in scams that start on social media: the platform, the bank or the victim.

A crack in Section 230?

Bouck v. Meta is not the first time a judge has let a scam-ad suit past Section 230 on this theory.

In 2024, U.S. District Judge P. Casey Pitts refused to dismiss a similar suit brought by the Australian mining magnate Andrew Forrest, whose likeness scammers used in fraudulent cryptocurrency ads.

Pitts' order on Meta's motion to dismiss held that Meta's role in optimizing and generating ads raised factual questions Section 230 couldn't resolve.

That case, Forrest v. Meta, is now in discovery, and Seeborg leaned on Pitts's reasoning.

Eric Goldman, a Santa Clara University law professor who has studied Section 230 for decades, told American Banker he sees both rulings as outliers.

Since a 2009 case known as Goddard v. Google, courts have widely held that Section 230 covers many claims over fraudulent ads, and plaintiffs "have been trying to find ways around that longstanding principle ever since," he said.

Getting past Meta's motion to dismiss does not guarantee the plaintiffs win, Goldman said. The Ninth Circuit, which would hear any appeal in both cases, "continues to reject attempts to work around Section 230 based on algorithmic involvement," Goldman said.

In other words, banks hoping these lawsuits will force Meta to rein in scam ads shouldn't expect relief soon, if at all.

How the scam worked

The fraud behind Bouck worked like a lot of online investment scams, which typically involve strangers who gain a victim's trust online, then funnel them into bogus or manipulated trades.

A Facebook or Instagram ad allegedly pulled victims into a group chat on WhatsApp, where operators coached them to buy shares of China Liberal Education Holdings, a Chinese penny stock that traded under the ticker CLEU.

As the buying pushed the price up, the operators allegedly sold their own shares into the rally, a social-media version of the pump-and-dump that investigators call a ramp-and-dump.

The CLEU fraud also drew criminal charges. In March 2025, federal prosecutors in the Northern District of Illinois indicted seven people, all based in China and posing as U.S. investment advisers, over the scheme.

The government won more than $200 million in civil forfeiture, and the Nasdaq delisted CLEU, according to the Justice Department.

That criminal case is the kind Section 230 cannot touch, Goldman said, because the law does not cover federal prosecutions; other defenses, like the First Amendment, would still apply.

State-law claims are different. Section 230 can block those, he said, so it could still shield Meta in a civil suit like the one Santa Clara County has brought against the company.

What Meta makes, and who pays

Meta allegedly earns about $7 billion a year from what it internally calls "violating revenue," carries roughly 15 billion scam ads a day and accounts for about a third of all successful scams in the United States.

Those allegations come from Santa Clara County, based on internal Meta documents first reported by Reuters. In May, the county filed a civil complaint against the company, asking the court to stop certain of Meta's ad practices, return money to defrauded consumers and impose civil penalties.

The same documents describe internal "revenue guardrails" that cap how hard Meta polices fraudulent advertisers, according to the county.

Those sums are a fraction of Meta's business; the company reported about $201 billion in revenue for 2025, roughly 98% of it from advertising, according to its latest annual earnings report.

Banks and their customers end up paying. In the U.S., a customer who gets tricked into authorizing a payment usually has little right to a refund, so the loss often stays with them.

Banks take the hit in terms of reputational damage, the cost of fighting fraud and pressure from regulators and lawmakers to stop the scams at the source.

Banks abroad have started to put numbers on the problem. At Lloyds Banking Group, 68% of customers' fraud reports now start on Meta's platforms, and people aged 24 to 34 are the hardest-hit group, a bank spokesperson told American Banker.

Lloyds estimates that UK consumers will hand fraudsters about £66 million ($89 million) over the course of a year through scams on Meta platforms, an industry-wide figure drawn from UK Finance data rather than the bank's own losses.

A group action in Britain (the equivalent of a class action in the U.S.) is pressing Meta over the same business model. The attorneys who brought the case put the average victim's loss at £63,000.

Martin Richardson, the senior partner at Richardson Hartley Law (one of the firms that brought the case), told American Banker that fraudsters now re-target nearly all victims with so-called recovery scams, fake services that promise to claw back lost money.

"We believe that the Facebook and Instagram algorithm also helps fraudsters target existing scam victims," he said.

The cases against Meta are converging on discovery, where the platform may finally have to turn over the internal records that plaintiffs and prosecutors have so far only described.

The Bouck ruling only let the fraud claims proceed; it did not decide whether Meta is liable. That leaves a larger question open, for now: Will the courts force Meta to change how it sells ads, or will that be up to Congress?